Though rental rate growth has been restrained in the last two years, we’ve seen an increase in absorption of Class A assets in the Minneapolis CBD. Also, Class A construction is booming in micromarkets peripheral to the CBD Core, like North Loop and East Town. Though law firms won’t be leaving the CBD core soon, they may instead be getting creative about their office space.
We may not have a crystal ball, but our research tells a story. Here are our predictions for the future of law firms:
- Saving costs will force space creativity – We expect law firms to continue evaluating ways in which they can save costs. This may mean they look for unique ways to save space, like moving their back-office operations into less expensive space outside of the Minneapolis CBD.
- More Class A space available – We are experiencing major office repurposing projects in the CBD pipeline, like the former Macy’s building. If these renovations result in true Class A office space, like we expect, there’s a potential for slack in the market as supply increases.
- The leverage moves away from the landlord – Historically speaking, the square feet and rent per attorney in the Twin Cities was around 900-1,000 s.f. and $50,000. Now, we’ve moved to 700-850 s.f. and $45,000. We expect the future will lean toward 550-650 s.f. and $40,000.
For a complete look at our analysis of law firms and their impact on the Twin Cities, download our Law Firm Perspective here.
Have questions? Feel free to email or drop us a line for more information, 612 217 5150.